HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

ECONOMIC DEVELOPMENT COMMITTEE

Mr. Keith Colwell (Chairman)

Hon. Judy Streatch

Mr. Keith Bain

Mr. Chuck Porter

Mr. Clarrie MacKinnon

Ms. Vicki Conrad

Mr. Leonard Preyra

Ms. Diana Whalen

Mr. Harold Theriault

[Hon. Judy Streatch was replaced by Mr. James Muir.]

In Attendance:

Ms. Jana Hodgson

Legislative Committee Clerk

WITNESSES

Halifax Port Authority

Ms. Karen Oldfield

President & CEO

Mr. George Malec

VP, Business Development & Operations

Mr. Mark MacDonald

Chair

HALIFAX, TUESDAY, JANUARY 13, 2009

STANDING COMMITTEE ON ECONOMIC DEVELOPMENT

9:00 A.M.

CHAIRMAN

Mr. Keith Colwell

MR. CHAIRMAN: I'd like to call the committee to order and I apologize again for some of our members being a little bit late. We've got messages from at least two other members who will be here very shortly. So I think we'll get started. I will start with introduction of the members.

[The committee members introduced themselves.]

MR. CHAIRMAN: I would ask you to introduce yourselves and proceed with your presentation, please.

MR. MARK MACDONALD: Good morning, Mr. Chairman, thank you for the opportunity to present to you this morning. My name is Mark MacDonald, I'm Chair of the Board of the Halifax Port Authority. With me is Karen Oldfield. Karen is known to most in the room and has been CEO of the Port Authority since January 2002.

On my right - your left - is George Malec, Vice-President of Business Development and Operations of the port. George has worked around the Port of Halifax for something approaching 30 years, which is surprising just by his young age. (Laughter)

I have personally and directly been involved with the port board of directors for the past three and a half years or so, and about a year and a half ago was elected as Chair of the Board.

We understand the format, we think, Mr. Chairman. Our intent is to begin with about a 10-minute presentation in which I will speak briefly and Karen Oldfield will speak briefly. We know that most of the - good morning, Mr. Theriault - most of the members in the room are very familiar with the port, but we want to extend the general invitation to all of you to come and visit us as often as you would like so that we can familiarize you with everything that, in fact, is going on at the Port of Halifax.

We'll speak briefly this morning to the port's role in economic development of our city, our province and our region. This is an integral part of the Port Authority's mandate and a part of our mandate which we take very seriously.

Members were provided with a more detailed presentation, a PowerPoint presentation in the materials which we provided. We'll run through a quick presentation, which is essentially a synopsis of that.

The Halifax Port Authority is one of 17 Canadian port authorities. The Port of Halifax is a broader concept than the Halifax Port Authority itself. The Port Authority is an independent federal agency governed by the provisions of the Canada Marine Act, whose mandate is to develop, market and manage our assets in order to foster and promote trade and transportation.

We see our role - and this is incorporated in the legislation - as serving as a catalyst for local, regional and national economies. Of course, there are businesses throughout every corner of our province that are very dependent on the efficient operation of the Port of Halifax.

As with other Canadian port authorities, it's important to note that the Halifax Port Authority is required by law to be financially self-sufficient. Our revenues are derived from the operations of the port, not from taxpayer dollars or from government appropriations. This is a very different model than the one which is followed typically in U.S. ports where state and federal funding and government-backed bond issues are typically employed as part of the financing vehicles for the port.

At the Port of Halifax, we have to look after ourselves. That is what has led our port to seek in 2007, and to obtain - and to be the first port in Canada to do so - an A stable credit rating from Standard & Poor's. We went through a very exhaustive bond-rating process with the rating company leading to the issuance of that rating in 2007, which was reaffirmed recently in late 2008.

One of our key roles at the port is the facilitation of investment and the making of investment ourselves in port infrastructure. The obtaining of the Standard & Poor's credit rating by the port, we saw and our board saw as a key step in enabling us to continue to do that and to continue to be self-sufficient as we are mandated to be by the legislation.

Karen will speak in some more detail to the different lines of business of the port and what the port does on the day-to-day cargo business, cruise business, stewardship of our real estate assets.

In conclusion of my comments, I want to speak to the specific objective which this board has had, and predecessor boards have had, to stabilize and diversify the revenue base of the Halifax Port Authority, to enable the port to grow strong and to enable the port to maintain stability during periods of tough economic times when one or more of the business lines of the port may be facing challenges. That was a very conscious strategy established by our board a number of years ago and followed by the port up until this time. It has proven to be an invaluable strategy as we enter and, to some extent, as we have come through the period of economic downturn that the shipping industry and the world economy is seeing. We're happy to see, if one looks at the rationale behind the credit rating, that the port has achieved some independent validation of that strategy by the bond raters who, of course, look very carefully at the business of the port.

Thank you, Mr. Chairman, I will turn it over to Karen.

MS. KAREN OLDFIELD: Mr. Chairman, I want to start by talking a little bit about the various lines of business that we have at the port. I would like to start by recognizing that the Port of Halifax is what might be called a full-service port, or a multi-service port. We are very fortunate here to be in a position where we have a very broad base of businesses and, of course, that's buttressed in the Port of Halifax by many private-sector initiatives, including the petroleum, including National Gypsum, including some of the bulk products which are not under the auspices of the Port Authority itself. So let me talk a little bit about those lines of business.

First of all, on the cargo side we do break our overall cargo line of business down into bulk commodities, breakbulk cargo, as well as our containerized goods. For example, just to give you a flavour, the bulk side would include grain from Nova Scotia farmers, it would include wood pellets and it would also include liquid bulk-type products which are used at the refinery.

In terms of breakbulk cargo we actually have had some very interesting project cargo over the last number of years. In fact, our stevedores here in Halifax have developed quite a good reputation for moving specialty cargo through the Port of Halifax that may go all the way to Fort McMurray, so specialized project cargo that would be used in industries completely far afield from the marine industry per se. We have done a lot of project cargo for the offshore, but our breakbulk cargo would also include, for example, rolls of newsprint from Port Hawkesbury, it would include steel coils which we house and warehouse for Michelin which would supply the three plants in Nova Scotia and, as well, our breakbulk cargo would include a lot of Cuban sulphides which come from Cuba and are moved inland to an Alberta mineral refinery. So that part of our business is alive and well and is part of our

business that affects a large part of Nova Scotia, and it's always important to point out how that actually ties through the Port of Halifax.

[9:15 a.m.]

On the container side we have had quite a challenge over the past 18 months, in fact, the port has really been a bit of a bellwether for what has transpired in the global economy. I'm sure that we'll have lots of time today in the questions and answers to get at that.

What I would like to say at this point in the presentation is that a number of years ago - I'm going to say five years ago - when we looked at our containerized business, we actually saw and anticipated a change in our traditional markets, which for the Port of Halifax have always been the European market and the northern European market. We saw a softening in that market vis-à-vis the Port of Halifax and recognized that in order to continue to grow our containerized traffic through the port it would be necessary to shore up and make sure that we were continuing to press on the European side, but also to find a way to attach ourselves to the world's fastest growing markets which, as we all know, over the past five years have been the Asian markets. We'll have an opportunity today, I hope, to discuss that further.

As well, one of the other cargo areas that the Port of Halifax serves is roll-on/roll-off traffic. I'd like to touch on cruise, that's a very visible part of the traffic at the port, particularly in our primary cruise season which is August, September, October and a little bit into November. We are coming off a record cruise year in 2008 and the prospects heading into 2009 look very solid as well.

One of the areas in which we have been working, in terms of promoting our own mandate for economic development and our own statutory mandate to serve as a catalyst for economic development, is around the home porting which - so that we're all on the same page - means a vessel which actually loads passengers here in Halifax, goes on the cruise around our area and then comes back, and passengers will disembark here as well. The primary distinction between port of call and home porting is it typically will mean, instead of a cruise ship being in town for eight or 10 hours for passengers to disembark and see Halifax and the surrounding area, home porting typically will mean passengers come by air, they may spend a night in a hotel, enjoy more time in our city. So there is a good economic impact from our home-porting activities.

The other area, of course, which our chairman touched upon was the prudent stewardship of real estate assets. We have, at the Halifax Port Authority, approximately 268 acres of land under administration. One of the aspects of our business which we pursued, once becoming a Canadian Port Authority with a mandate to be financially self-sufficient, is to look at underutilized assets and to find a way to take underutilized assets to support other key areas of our business. For example, we have done that at various areas around the port, in support of key core business activities, whether it be cargo or whether it be cruise.

We are just in the throes of finishing our most recent economic impact study. It will be available within the next few weeks. It's not quite complete, but we do have sufficient information which enables me to share with the committee today that the impact of the Port of Halifax in our city, in our province, really covers multi modes. Obviously it covers the marine mode, it also covers rail, trucking, cruise, tourism, as well as construction which comes about from our capital plan and from renovations that we do around the port. When you take all of that together, we are talking about roughly 11,000 direct, indirect and induced jobs. We are talking about a $700 million impact in gross domestic product. So I think we all know intuitively the engine which is represented by the Port of Halifax, but this just puts it in some numeric terms.

I would be very unfair to our partners if I did not talk about the importance of partnerships around the port. If you can think of a bicycle wheel, we really see ourselves as the hub in that bicycle wheel. There are many, many partners, stakeholders, private-sector investors, who actually work together to make the Port of Halifax work. In a global supply chain world or in a world where decisions are made very far from the City of Halifax, it is absolutely imperative that we be working together, working in partnership and finding ways to be successful together. So our partnerships include members from our port community. That could be tenants we have, which would include, for example, Ceres, it would include Halterm, but also many of the other port businesses.

Our partnerships also include members of the broader business community that come to the port looking for research, looking for development opportunities, looking for ways to partner to actually lever the port to increase their own business opportunities. There, Mr. Chairman and members of the committee, I would like to share a small example that actually brings to life what I'm talking about here in terms of partnership. The example that I would like to point to is the example of Canadian Tire. We've all heard of the great Canadian business Canadian Tire. About, I'm going to say, five years ago - it could have been six years ago - Canadian Tire . . .

MR. CHAIRMAN: Excuse me, could you get a little bit closer to the mic, if you don't mind.

MS. OLDFIELD: Sure, not a problem. Approximately five years ago Canadian Tire, as a business initiative of its own, determined that it wanted to find ways to rationalize the use of assets across the country. One of Canadian Tire's key partners is a company called Consolidated Fastfrate. Consolidated Fastfrate came to Halifax on an initial fact-finding expedition and at the time initially went to one of our terminal operators, looking for ways that they could get into a business called transload, which was actually new to the port at that time. The terminal operator called the Port Authority, can you help? The Port Authority sat down with Fastfrate and things actually happened fairly quickly after that. Together with Fastfrate, a meeting was put together which included representatives of shipping lines, which included some other businesses related to the port.

The purpose of the meeting, which was held in Toronto, was to determine if this is something that we could do in the Port of Halifax. Will shipping lines come? Will they use a transload service? So in a nutshell, the transload service means an international container coming into the port, going to an off-dock warehouse, being unloaded in that warehouse, and then being reloaded in domestic containers and being railed or trucked to inland markets.

In the case of Canadian Tire, just to use that example, it would mean that the domestic containers would go to every Canadian Tire store that might exist in Atlantic Canada, versus what had been happening previously, which is that containers might come into the Port of Halifax, go by rail to Toronto where the unloading and reloading would happen, and then be railed back to Atlantic Canada. So it was an opportunity to do value-add right here in Nova Scotia.

To make a long story short, Consolidated Fastfrate got sufficient comfort that this is an opportunity that they could pursue and they worked with us but also with Halifax Regional Municipality and worked a lot through the efforts of the GHP to actually build their transload facility, which did open within the last year and a bit. We're very, very pleased that another company, similar to Consolidated Fastfrate, which is Armour Transportation, is opening a similar type of facility within the next four to six weeks. This is a great example of the Port Authority serving as a catalyst for spinoff business.

It is important to us, as a port, because it gives shipping lines yet another reason to call the Port of Halifax because these services are available here. My point, however, is that's not the kind of initiative that the HPA could pursue alone. We don't have the contacts, we don't have the reach to put all of that together, yet through our partnerships with the GHP and others, we could definitely facilitate the coming together of the people needed to make that a reality.

The last point, I guess, on partnership, I did want to touch on infrastructure and private investment. Infrastructure is another area where we work in concert with our partners. In particular, for the Port Authority, that would include the two terminal operators, as well as CN. We have invested, over the last five years, in excess of $55 million in capital projects at the Port of Halifax. Typically we will sit down with the terminal operators and with CN to say, what do we need to do next? Where is the next best strategic investment to take our port to the next level? So that, again, we do as a partnership, very much a joint effort.

I'd like to touch, Mr. Chairman and committee members, for a moment on the capacity of the Port of Halifax, which is very often a topic of conversation, and share with the committee. When we look at our two container terminals, Halterm in the south end of the city and Ceres at Fairview Cove, we have a current capacity right now, today, with those two footprints, of 1.4 million TEUs - TEU is 20-foot equivalent units. If you were driving along the Bedford Highway, if you were looking at the containers on the rail cars, if you were to

look at a little box, that's a 20-footer and the larger box is a 40-footer. So the industry measurement is something called a TEU, 20-foot equivalent unit, which is the smaller box.

We have a capacity of 1.4 million TEUs, with the two terminals. We also have done some preliminary planning and some preliminary engineering to understand exactly how we can expand both of our terminals, which expansion would add to our current capacity and would give the Port of Halifax the ability to handle 2.5 million TEUs.

We are very fortunate in our port to have CN as a rail service provider in that CN also has the ability to more than triple the volume on the main line. So there's lots of capacity on the CN main line in and out of the Port of Halifax. Just as a fact, we do have in our port five super post-Panamax cranes and those cranes in our port can accommodate the largest vessels on the water today and we have seven Panamax-size cranes. So over the past number of years, the port has really been built out, the infrastructure is quite robust. We are able to take very large ships and that is a big advantage for Nova Scotia and for Atlantic Canada.

In conclusion, what is our place in the world, Mr. Chairman? I would conclude by sharing with the committee, as you all know, Nova Scotia does not have a huge population in terms of a consumer market. We have, I think - the last number I looked at was shy of one million, perhaps 930,000 people in the Province of Nova Scotia. Why I raise that is that we are not the consumer market in Nova Scotia. When we look at Atlantic Canada, the last figures I saw, there are approximately 2.3 million people in Atlantic Canada. So our market is inland markets; it is the markets in Montreal, Toronto and specifically the U.S. Midwest, where there are large bases of consumers, by way of population, and also the manufacturing base of North America.

[9:30 a.m.]

Our whole raison d'être is to move goods through the Port of Halifax and to these inland markets, so the notion of excellent service at a very cost-efficient cost equation is very, very important to the success of our port.

Finally, as I mentioned earlier, we have had a record year this year on the cruise side, which bodes well for 2009. We have good, reasonable, home-porting prospects and we are very focused on making sure that the 268 acres of real estate that we have as lands under administration are utilized in such a way that we perform the mandate that we have been charged with under the Canada Marine Act.

I believe, Mr. Chairman, we'll conclude the presentation with a nice overhead view of the Port of Halifax and turn it back to you and open it up for questions.

MR. CHAIRMAN: Thank you very much, that was a very good presentation. We'll start with Mr. Preyra.

MR. LEONARD PREYRA: Thank you, Mr. Chairman, and good morning. It's always nice to welcome a small constituency organization to this committee. In particular I'd like to welcome Mr. Malec, I haven't seen him in a number of years. We coached against each other for almost a decade and we had a fine rivalry. I know that if he brings to the port the kind of competitive instincts and creativity that he brought to the soccer field, I'm sure the port is in very good hands. Anyway, thank you very much for the presentation, it was a good overview.

I want to just say at the outset that we're all concerned about the port, it is the lifeblood of our economy. As you say, it contributes about $700 million in GDP to the economy, about 11,000 to 15,000 jobs in peak times, so it is really important. We're all concerned about improving the reliability of the port, its performance, its competitiveness, not just of the port but also of its transportation and supply chain. So we welcome this opportunity because it seems to me that the world has changed so significantly in the last couple of months that we have to throw out all of our old assumptions and work in a new, much more challenging world.

I want to start by asking about CN. I've looked at this literature very carefully and it seems to me that we talk a lot about CN's capacity, that it has the ability to more than triple its volumes; CN is our connection to inland markets; it's doing a great job in other parts of the continent. But the reality seems to be slightly different in that we have one rail and we have one service a day, and we hear about large corporations like Caterpillar and Loblaw saying that they won't come to Halifax in part because of the ability to move goods to inland markets. I'm wondering, what is the challenge with CN, what do we need to do to make it more reliable and improve its performance and make it more competitive?

MS. OLDFIELD: I'll start off, Mr. Preyra, and then certainly invite Mark and George to supplement. No question, CN is the lifeblood of the Port of Halifax, and that is certainly the case whether we're talking about containerized cargo or other project cargo. We simply need to work together to ensure the overall success of the Port of Halifax and it is not always an easy task to do that, particularly when we may want different things.

When I say that, we have to appreciate that the world did change in terms of CN, when CN was privatized and now CN, of course, is very focused on shareholder value and must work to protect interests of the shareholders, which is very different from perhaps how CN was working and looking at the Port of Halifax in years gone by. So that is a fact and what that means in terms of the port, and particularly the HPA, the way we look at it is that we need to find ways to help CN win because if they win, we win. Now having said that, specifically how we attack that or how we go at that, we've done several things that I'll share with you.

First of all, in 2002-03, CN instituted a program called IMX, Intermodal Excellence. They brought that program into the system across the country, they started with Halifax and it was a radical change in the way railcars were provided to the port. As a result of that though, some good things did come about. One good thing which came about was that the port, the terminal operators, the shipping lines, and CN sat down and worked out a series of key performance indicators that we then translated to an electronic data information exchange. For example, on-time vessels, on-time train arrival, and so on and so forth, there were a number of indicators. Why I mention that is because we were able over a period of time to perfect the electronic data exchange of the sharing of that information.

One of the great things that came about from that was it really stopped finger pointing. Instead of just relying on anecdotes and he said-she said, we were able to go to data, cold, hard facts and it really helped to improve service through the Port of Halifax. That then led to the innovation of a container tracking system, again, an electronic piece of information which was developed through the co-operation of the groups mentioned, the terminal operators, the shipping lines and CN.

The reason why I raise those two examples is they are ways that the port community comes together, including together with CN, to find operational ways to benchmark the performance and to then target ways that we can improve that, where are the challenges, where are the problems. We are working quite closely, and have been over a long period of time, to do that.

The other thing, completely aside from operational matters, is on the marketing side. I'll come back to the point, I just need to segue a tiny bit to just share a little bit of the way it works. The Halifax Port Authority, our organization, does not contract directly with shipping lines. We do not contract directly with the groups that move boxes over the port. Rather, the way it works is, we have two primary leases, one of which is with Halterm, one of which is with Ceres. Those two terminal operators in turn will have a direct contract with a shipping line and the shipping line will have a contract with the railroad. We are, if I could put it this way, sort of a long way away from the actual contract which is signed to move a box over the Port of Halifax.

Having said all of that, it's very important for all of those key players, the terminal operators, the railroad, us - if it makes sense - to actually work together to sell the services of the Port of Halifax to that end customer. From that perspective, coming back to your question, it's very important that we work closely with CN, on the same page as CN, to actually market over the port. I'll just pause there and ask George if he wants to add to that.

MR. GEORGE MALEC: Thank you. There are two critical elements of the CN relationship we have and it's worth noting that we're, in fact, two ports in Halifax. Some of you may be familiar with a recent report produced by the Atlantic Institute of Market Studies on this topic. There is the local constituency, as Karen has referred to, which is largely

serviced by truck and short-sea shipping. That would account for somewhere in the vicinity of 125,000 TEUs. That is our local market and that's not a rail market.

To grow the economies of scale to make this port competitive, to keep the pricing down, to have sufficient capital for investment, to have the volume you need to keep people on staff, to keep them current with their training, their capabilities, to generate the revenues you need to invest, you need a bigger market than that. That is the inland portion of our market that Karen alluded to in her comments about the Toronto, Quebec, Sarnia tunnel connection into the Midwest, which is part two of that whole market. So we have two very distinct operating models that we use here for the inland carriage.

On the CN price of that we have to recognize two things. Because they are a totally private company which responds directly to their shareholders, they treat their shareholders as their customers, and that hasn't always been terribly helpful when you're trying to negotiate contracts or attract business, but that is simply a fact. Like the shipping lines we work with, like the terminal operators we work with, they're private companies that have their own mandate and their own set of priorities.

Having said that, we have made quite a bit of progress over the last few years working with their business development team, specifically on the competitive advantages of putting together common pricing. Their piece of the inland pricing is, of course, very significant when a shipping line makes a decision to route boxes over the Port of Halifax. That can be readily explained and understood by the fact that if we're competing with ports like New York, down the east coast of North America for that traffic volume, the running distance inland from New York to Chicago is approximately 1,200 kilometres on rail; it's 2,600 kilometres from Halifax to Chicago.

The traditional advantage of using the Port of Halifax is our geography which places us on that shorter ocean leg transit distance. When you're coming through the Suez Canal, or coming through the Strait of Gibraltar, or coming from North Europe, you shave off approximately a day's sailing time when you're coming down the coast of Nova Scotia, before you get to New York and going down the coast to Norfolk, so that's the plus side of the ledger.

MR. CHAIRMAN: Order, please. Mr. Preyra's time has expired.

MR. MALEC: Sorry, we get passionate about this. We can talk a lot.

MR. CHAIRMAN: Any thoughts the presenters would like to finalize at the end of the meeting, that would be fine, but each member has a certain amount of time, so if you just want to wrap up with anything, you're welcome to do that. Ms. Whalen.

MS. DIANA WHALEN: Mr. Chairman, how much time are you giving to us?

MR. CHAIRMAN: I'm going to give you 11 minutes now - it was 10, but it's 11.

MS. WHALEN: Okay, so we need some shorter snappers, I think. I had a number of questions and I know it's a complex industry and there's a lot to tell us about, I appreciate that. I think we've gotten a good overview in the beginning but each of these questions can unveil a lot more.

Some of my concerns come from the future, the challenges that are facing the port and the opportunity that the Gateway infrastructure money may present. We haven't touched, really, on the opportunity of infrastructure money coming from the federal government and perhaps provincial matching, of course, to make that happen.

I wanted to look at your role within the Gateway planning and if you could tell me briefly what your role is. I know there's a committee, but what are you doing?

MS. OLDFIELD: Sure, let me start. First of all, it's interesting, you know, sometimes the stars and the moon have the potential to line up and we, the collective, may have an opportunity to actually help to push the port forward with the overall Gateway initiative.

Now, there are a couple of things going on which specifically relate to the Port of Halifax. One is the Halifax Gateway Council, you may have heard of that. The Halifax Gateway Council is a coming together of the key modes that make up this gateway. That would include the airport, that would include the port, that would include trucking, that would include CN and that would also include some of the add-on members, which would be levels of government and the GHP. So that was the start of it, the coming together, the voluntary coming together of those groups to say, how can we work together, how can we lever each other, and how can we share the opportunities and meet the challenges together?

[9:45 a.m.]

Now, interestingly enough, the coming together of the Halifax Gateway really coincided with an initiative of the federal government, first with respect to the Pacific Gateway, then coming to be a broader National Gateway initiative, which is now the opportunity before us. So there is a federal minister now who has the mandate for the Atlantic Gateway, which is across the entire Atlantic Provinces, not just Halifax, not just Nova Scotia. So Minister MacKay did convene a meeting within the last two months of many of the players across Atlantic Canada, to get their thoughts in terms of how we can push this forward. There are still a lot of preliminaries there . . .

MS. WHALEN: Can I interrupt, because I know it will go on here. My specific questions would be on the infrastructure side, if dollars are coming, have you got any idea what would be allocated to the entire Atlantic Gateway . . .

MS. OLDFIELD: No.

MS. WHALEN: . . . and, in your own mind, how much might come this way?

MS. OLDFIELD: That's the $69 million question, so to speak. The answer is no, we do not. We are advised that all decisions will be made on a business-case basis. We are told that there will be an application process and this is something that comes to us via Transport Canada. We're looking at an application process, a business-case-based, decision-making process, so our job is to get to the nitty-gritty, to make sure that we have our vision piece, if you like, well mapped out, well costed and in a position to advance.

MS. WHALEN: So if I could take it from that point, there was some talk lately using the term "shovel-ready", are projects shovel-ready, can we get going? The government has an incentive now to be spending more quickly, not to hold things up but to get projects going, to stimulate the economy which was not - as you said, you've been a bellwether, you've seen this coming for some time, the rest of the economy has not been feeling it.

Given that, the government will be looking for projects that are ready, that the planning has been done, that the thought has been put into. So do you have projects like that and can you tell me your priorities - in this perfect world where government money will come to help you compete with American ports that get government money?

MS. OLDFIELD: We do have our plan put together and, in fact, with the current opportunity in front of us, represented by the potential under the Gateway, we're back to the drawing board, fine tuning that. Whereas once upon a time you may have done some Class D estimates, we're now sharpening those estimates to make sure that we are ready for the shovel-ready projects.

In that regard, I mentioned in my presentation that we have the ability to expand two terminals. So when we take the 1,000-piece puzzle, we really look at our 268 acres of land under administration - which would include Halterm, includes Fairview Cove and includes Richmond Terminals in Halifax - we look at those three primary sections to look at ways that we can augment, make them better, more productive, more cost-competitive, so we have all of that in the works.

MS. WHALEN: So what about your priorities? Is there any particular project that would be top priority?

MS. OLDFIELD: It's a fair question and interesting. I guess the way we will approach it is to put our entire 1,000-piece puzzle together; we will have listed projects, we will have price tags attached, and then we will have to enter into a series of discussions - not just us but with others - on what is the overall priority. I'm not trying to not answer but it's not going to be just what we say are the priorities, because it will be a broader thing.

MS. WHALEN: In terms of the rail cut coming into the Halterm and the discussion around spending money to improve that and improving trucking in and out of that, that's certainly an HRM priority because of municipal issues, but what kind of a priority is it for the port? Would it impact your efficiency?

MS. OLDFIELD: It will impact efficiency. Being in a position to go from A to B quickly, productively, in a less amount of time, with fewer emissions and so on and so forth, is something which would be of overall assistance to the terminal operator in the South End.

MS. WHALEN: Is there any idea how fast it would be, how much time it would save?

MS. OLDFIELD: No, it's preliminary at this stage.

MS. WHALEN: So you haven't sharpened the pencil on that. I think that's important to us to know in terms of the relative amount of expenditure there.

You indicated $250 million in expenditure on the port. Was that in a single year?

MS. OLDFIELD: That would have been over a period of probably two to three, of private-sector investment. So just specifically to tell you what I'm talking about there, that would include, for example, the purchase of Halterm, which was a private-sector investment.

MR. MALEC: And the big-ticket items, like the acquisition of the new, super post-Panamax cranes, which are approximately $10 million apiece.

MS. OLDFIELD: That's right.

MS. WHALEN: They're about $10 million? It's just to put it in focus. Right now I see one of the major challenges is going to be the competition with the Port of New York and the fact that their dredging will be complete, and around 2010 you'll probably know exactly. I just heard that late this decade they're supposed to be ready to be complete. Have they gotten to their 50-foot whatever it is?

MR. MALEC: No, they haven't done that yet.

MS. WHALEN: When they do, though, that means they can accommodate all the ships that are now being kind of off-loaded or lightened here, so they can go to New York or vice versa?

MS. OLDFIELD: In terms of depth of water, yes, but they also have a bridge at the Port of New York-New Jersey which is quite an impact, so they have to worry about air draft and they have to worry about depth of water. They have several issues.

MS. WHALEN: So how much of a competition or threat is this work that has been going on in New York? Do you think it's going to devastate this port, our port, or is it certainly a challenge?

MS. OLDFIELD: Interestingly enough, one can look at the Port of New York actually as - you can look at Halifax as actually making the Port of New York work. I mentioned a bridge and there are only two terminals - one terminal outside of that bridge in the Port of New York. What Halifax does, it enables vessels to come in lightened so that they can actually transit New York, and then when they leave New York they top-up so that they can go across the Atlantic. So if you look at it that way, we're complementary.

It's not likely to change overnight because they're looking at both water depth and air draft issues, which relate to the Bay-owned bridge.

MS. WHALEN: So you don't see that changing dramatically?

MR. MALEC: To your point, as well, we actually spend a fair bit of time with the New York Port Authority and work with them on a fairly collegial basis on what we can do together, because their competition - they don't see Halifax as the great evil. They're looking down the coast at Norfolk, and they're saying okay, the shipping lines that are calling in at Halifax, seven out of eight container lines coming out of Halifax are either coming to or going from the Port of New York. So it's the shipping lines that we're actually looking at targeting together, saying what makes the most sense for them cost-wise, efficiency-wise, if they take off a percentage of their cargo or load it back here?

To give you an example of what I'm speaking to here, the ship leaves New York, it's not on its full draft marks, it can't be and it can't take on full bunkers to make the ocean voyage back to the Suez, line up for convoy. Halifax is a perfect staging last port out for it to get its full nominal capacity, and that's money.

MS. WHALEN: My concern, George, was whether or not it would even be necessary for them to come here in the future once they've done this very expensive infrastructure.

MR. MALEC: That's correct. The other part of your answer is the fact that we play to our core strengths, as well, in our market when we reach out to the shipping lines and do these proposals, like the refrigerated cargo trade. That is very important, it's the most lucrative piece of business that shipping lines get, our seafood, our apples, things like that, very lucrative, well-paying cargo for them, so that's part of the hook to make that call all work. You can bunker, you can get this high-value cargo and we can offer a service to the shipper to say on the inbound leg you can get into Chicago a day faster on your cargo too, so it's a time-sensitive matter. So we put it all together, it's a very complex package.

MS. OLDFIELD: But you know, market is so interesting because if you went to a sector, let's say the garment industry, well, the North American capital of the garment industry is New York, so if you go to a sector, we're not going to compete with New York for that sector because those vessels are going to go directly to New York. It's such a complex business in the sense that we can talk about the bunkers and air draft and this and that, but then at the end of the day we always have to go back to supply and demand as well.

MR. CHAIRMAN: Order, please. Mr. Muir.

MR. JAMES MUIR: Thank you, Mr. Chairman. It's a very interesting presentation and it has been awhile since I've had the opportunity to learn some detail about the Port Authority. I have a couple of short questions. How many of those container ships pass through Halifax a year?

MR. MALEC: The turnaround is approximately 2,000 commercial vessels a year for the whole port, about which 700 are container-ship voyages.

MR. MUIR: You talked about the cruise ships as being a big part now, you had a record year last year. In terms of revenue, how do you make revenue off cruise ships? I guess you charge them to berth and stuff like that, what percentage of your revenue would come from cruise ships as opposed to cargo?

MR. MALEC: There are two basic ways that the Port Authority itself, as distinct from all the other participants in the cruise development, make their revenue. The first charge we make revenue on is the actual vessel charge. There is so much of a charge per vessel size for the length of stay along the dock, which is typically within one 12-hour period. That's how our tariff is set out and that's actually on our public Web site, it breaks it out very cleanly. There's also a passenger tariff that is assessed on the individual passengers. That money is then taken and reinvested.

For example, several years ago when we were looking at upgrading this port as the marquee port in Atlantic Canada for cruise development, the new fendering system alone along the seawall was $1 million, because you can't fool around with ships of that magnitude if you're going to attract these 3,000-plus passenger capacity vessels. That's where the revenue comes in and then we look at it in terms of physical infrastructure for handling the vessels. We built four new gangways for passenger access, egress along the seaport, and developed that infrastructure specific to handling passengers.

It's also very important to know that we have two different passenger bases, the summer passenger traffic, relatively young families with small children travelling on sort of three- to five-day mini cruises. When you get into September and October you get on a totally different passenger model with many retired or elderly passengers, some requiring wheelchair access, so we have to make sure this port can handle that properly.

MR. MUIR: What percentage of your revenue is generated between a cruise ship and the cargo?

MR. MALEC: It's a bit of a moving target because the different lines change in relation to each other. Overall, cruise would probably account for somewhere in the vicinity of 10 per cent, but I'm just going roughly off the top.

MS. OLDFIELD: That would be fair and I think the key there, as well, is to recognize that when we're talking about revenue to the Port Authority, we do derive revenue from cruise vessels, but the impact of a cruise vessel is to the broader community, that's where the value is. We would not be able to continue to reinvest the way we have been across the board simply on the basis of cruise revenue, but it has a very broad impact. For example, just to give you a couple of numbers, every cruise passenger who disembarks in the Port of Halifax will spend approximately $115 million.

MR. MUIR: Try that again?

MS. OLDFIELD: I'm sorry. I should have said $115 and every crew member who alights in the Port of Halifax will spend $90, so that's the kind of economic impact that we're seeing.

When you talk about a cruise in Halifax, it's really approximately an hour outside of the city, give or take. If a passenger is here for eight hours and takes a tour, they may go as far as an hour, a little bit more, but that's basically the reach of the cruise ship when it comes to the port.

MR. MUIR: Another question. The Autoport, is that part of your operation?

MR. MALEC: No. That's wholly owned by CN, it's outside the port limits actually and it's a CN-dedicated facility.

MR. MUIR: Does your organization have a relationship with the Autoport organization or CN?

MR. MALEC: They do participate in various forums that we do, for example, with the Halifax Shipping Association and the Shipping Federation of Canada in terms of commercial organizations around the port. We also have a common thread through the Newfoundland short-sea shipping service that Oceanex provides because they will actually go over and load the vehicles at Autoport, then come back to the Halifax side of the harbour, working at the Halterm facility, to do the roll-on/roll-off and general cargo and container operations before they go back on their run to Newfoundland. The ships do transit both facilities.

We will assist them with business development functions, for example, inaugural calls for new car carriers and the like, and we do the inclusion of them into any possibility where we can develop things like the Wallenius cargo on heavy agricultural machinery, pre-built machinery, where the two terminals, two sides of the harbour can complement each other on bringing in traffic that may be too extra-dimensional, too awkward for Autoport to handle, but so they can still bid on it, have that ship come in, we can handle part of the business for them here that they can't accommodate there.

[10:00 a.m.]

MR. MUIR: Mr. Preyra mentioned Caterpillar in his initial question and I thought Caterpillar had returned to the port, is that correct?

MS. OLDFIELD: Unfortunately, we're not in a position to get into all the ins and outs of a particular shipper. We continue to work with CN on the overall approach to that shipper, as well as a number of other shippers. I think that we would have some Caterpillar and it's a question of whether or not we are going to be able to continue to work with CN on that particular file.

MR. MUIR: Have I got time for another one?

MR. CHAIRMAN: Four minutes.

MR. MUIR: George, earlier you were talking in response about CN and it seems to me that one of the key players - well, obviously it is a key player - I can remember a couple of years ago there was criticism that CN wasn't bringing enough cars and I don't know

whether they were bringing enough cars, or they weren't turning it around, or whatever it was, but there was a lot of consternation about CN. I know that when Ms. Oldfield was speaking it seemed to indicate that whatever these were are gone. Is that the case now, whatever this relationship or the deficiencies or at least perceived deficiencies with CN and its relationship with the Port Authority from a couple of years ago, I take it from what you're saying it is a lot better now than it was?

MR. MALEC: And that would certainly be a fair statement, sir. There were a lot of customers who were very upset with the way CN imposed the IMX system in the early part of this decade. Having said that, to Karen's point, we've worked methodically with them and the terminal operators and everybody because everybody has got a piece in this. For example, how late do the cars actually arrive, the train arrival? When do they get placed on the terminal? Did the terminal operator work as soon as possible to load the import back and turn those cars back to CN? Were the vessels bunched? Were they all off schedule and three of them arrived at the same time and there was nothing for four days in advance of that so all of a sudden we've got a huge influx of traffic? That speaks to the whole car-supply issue.

What they have done for us is that at the request of the Port of Halifax, after CN made the unilateral announcement that they were going from two trains to one, we requested they come here and meet face-to-face with a CN executive team, with our customers and our terminal operators, to explain the decision. They did, and actually, from a business sense, the case does make sense. It's not necessarily harmful to the port, but then how are they going to stand up to the new service they promised? Then they came back a month later and then we asked them at that point, now you have to deliver a winter plan, in writing, which you haven't done before. They did do that as well.

So on some of those key commitments that they've made to us about sitting down with the common stakeholders and customers in the port and walking through what has happened, where their service has been, where they are going next, that has been done.

MS. OLDFIELD: However, I just conclude by saying that it is a constant, every day, all the time, working together, and that we continue to monitor that so we're in a position to work with CN to bring them to the table to talk to our customers and the port stakeholders. We can never let our foot off the gas and neither can they.

MR. CHAIRMAN: Order, please. Mr. MacKinnon.

MR. CLARRIE MACKINNON: Thank you very much, I'm going to try to be very quick here today because I know the member for Halifax Citadel-Sable Island has one of those facilities in his constituency. Very quickly - capacity. When we look at 1.4 TEUs capability currently, what are we putting through Fairview? What are we putting through the South End? What percentage of capacity are we operating at right now?

MS. OLDFIELD: Today we would be operating at - we're less this year, we will be less than 500,000 TEUs, so let's say roughly one-third if you use your 1.4 number. So we have lots of room to grow.

MR. MACKINNON: Okay, is the peninsula facility at sort of a disadvantage, from a location perspective? I think I asked this one time before and I believe the answer is that it is not - is that true?

MS. OLDFIELD: That is correct. We have to put the two terminals in context, not just our local context but in a global context, in an international context. So for example, if you take the South End facility, which is Halterm, Halterm is virtually jutting into the North Atlantic, if you just look at that picture. So the Halterm facility is the one we see here, actually. This is Halterm, here's the North Atlantic. It's an easy in, it's an easy out. When you look at ports on the east coast of North America, that's a gem, that terminal is a gem. So it does have a geographical advantage from that perspective.

MR. MACKINNON: But when we look at Gateway initiatives and elsewhere in Canada and revampings that are taking place in U.S. ports, and also the aspirations of the Strait area of Nova Scotia and Sydney, where do you stand in relationship to those? I mean how aggressive can one be when there are so many other aspirations out there?

MS. OLDFIELD: First of all, we take at face value the fact that there is a potential for a private-sector, privately owned terminal which will be constructed by private-sector investors. The market is going to dictate what happens there.

We have not been apprised of the business plan there. Rather, we're pretty focused on exactly the kinds of things that we're talking about here today - how do we make this port cost-efficient, productive; how do we take up our capacity; how do we, sitting here talking about room to grow, grow it; how do we take up that room? So that's where our focus is and that's where the direction is.

MR. MACKINNON: Mr. Chairman, sort of the old Gordon Sinclair question, when you look at the capacity, what's being handled and so on, when you look at the ratio between administrative costs and what's being handled, how does that compare with other ports in Canada?

MS. OLDFIELD: Actually that's a very favourable ratio and one of the things that we do when we put together our budget for our board, our HPA budget, we actually compare very favourably to admin costs in our competitor ports across the country and to our sister ports across the country, for example, Montreal or Port Metro Vancouver - they have a new name now - and also Prince Rupert. We have in the Port of Halifax approximately - in the HPA itself, our organization that the three of us represent - 65 people. We have overall gross revenues of just bumping up to $28 million. So in terms of people and costs, we actually

have a very lean structure and we don't have a lot of people involved in the HPA, yet we do have a lot of relationships which give us a fairly substantial reach.

MR. MACKINNON: So what are those 65 people costing, in relationship to - you didn't give a figure, did you?

MS. OLDFIELD: No.

MR. MARK MACDONALD: May I say something, sir? As part of - and Karen has alluded to this - as part of the budgeting process which we go through, firstly with the management of the port every year and then ultimately to the board of directors, we do a very rigorous comparison of all elements of our cost of operation and how they compare with other major ports in the country. We look at it in percentage terms, we look at it in absolute terms, and that's speaking as a board member of the port. It's very important to myself and other people on the board that this operation be cost-effective. That's why we go through that process and why, at the end of day, we have to be satisfied that those costs are in line, and they are or we wouldn't approve them.

MR. MACKINNON: And what are those costs in relationship to the total in administration? What are the administrative costs?

MR. MARK MACDONALD: Well, our financial statements are public. They're on the Web site, I assume. I can actually take a minute and go through and look at the GNA costs on the financial statements, but if you looked at our last financial statements you'd see gross revenues in the order of $28 million and earnings before interest depreciation between $12 million and $13 million.

MR. MACKINNON: Okay, I'll investigate further. How much time do I have left?

MR. CHAIRMAN: You have another almost five minutes.

MR. MACKINNON: This is the kind of guy I am. (Laughter)

MR. CHAIRMAN: You will share your time with Mr. Preyra?

MR. MACKINNON: He requested that, he has two more questions. I don't usually do that but he is a nice guy.

MR. PREYRA: You're still cutting into that time you offered me. (Laughter)

I have a quick question about short-sea shipping. I had passed on a document to you, Mr. Malec, put out by the U.S. Transportation Department and just recently, in the last few days, the Canadian Department of Transport has also released a similar report talking about

short-sea shipping. Why has short-sea shipping become so important and what is the port doing to develop that part of the business? That was our historic connection with Boston and the New England States and also the Port of Montreal. I'm wondering what's happening there and why it's happening.

MR. MALEC: That's correct. A couple of things, macro-economically, it's about the cost of infrastructure for roads, et cetera. In the United States they're faced with fairly daunting challenges about rebuilding their highway infrastructure and overall a lot of their transportation network - very expensive. Taking on reducing the volume of trucking on their main highways will reduce their infrastructure and maintenance costing, and it will also be an environmental plus in terms of reducing the amount of greenhouse gas emissions - two positive things.

Canada has done similar initiatives too. Environment Canada has done some, Transport Canada, as you can appreciate, it takes time for federal bureaucracies to align themselves and come out with a cohesive federal policy along that line.

Historically and factually today, Halifax is well positioned for short-sea shipping. We have several services which have been long-standing - I alluded to the Newfoundland connection earlier, we have the Saint-Pierre and Miquelon connection, we have worked with a vessel operator who is interested in a seasonal seaway shipping operation, and in the not-too-distant future you'll see the Seaway development authority here in the Port of Halifax doing a function with the Halifax Port Authority to promote and develop that concept of the short-sea shipping lane in the seaway.

We've also had a very traditional contact with the New England market in the Ports of Portland and Boston. Portland recently has fallen on hard times, their terminal has now ceased to function because their biggest carrier left, basically it filed for bankruptcy and that was it. But the Port of Boston and ourselves continue to work on positive innovations and that also includes a rail connection.

Short-sea shipping has been operated for 30 years between Halifax and Boston by a variety of carriers, normally, that's operated through different business models. The most recent one, operated by Eimskip, unfortunately stopped because they ran into massive business losses on a totally different part of their business and could no longer operate.

MR. PREYRA: Can I ask you another quick question before my time runs out? CN has said it was expected to build a transload and distribution facility near the Fairview Cove Terminal and we've seen those reports for a couple of years. How close are we to that; and the second part of that question is, was it a mistake to build the Atlantic Gateway-Halifax Logistics Park on the Burnside Industrial Park side where it's not connected as easily to rail? I think the whole transload distribution warehousing is a great development and everyone in

the world seems to be doing it, but I'm wondering, in terms of our strategy for transload, what is CN doing in Fairview Cove and what can we do to connect it a little better to rail?

[10:15 a.m.]

MR. MALEC: The CN area by the Fairview Cove Terminals, where they handle their domestic lumber right now, it's their transload yard, we stayed close to them, again because as you can appreciate, as a private company they keep their cards fairly close to their chest about when it's right for them to invest. They have an interest in this business, what they're doing is making sure that they can lock up several key shippers. For example, we alluded to the Canadian Tires of the world, Canadian Tire is working with Consolidated Fastfrate. CN's business model will be predicated on getting commitments from several key freight forwarders or shippers, then they would invest in a transload centre. So they're simply saying, it's not a question for them of chicken and egg, they have to have something in hand and then they're prepared to invest, that's what they have told us.

MR. CHAIRMAN: Order, please. Unfortunately, your time has expired again.

MR. MACKINNON: And my time has expired.

MR. PREYRA: Thank you, Mr. Chairman, and thank you to the member for Pictou East as well.

MR. CHAIRMAN: We have to keep that thought. Mr. Theriault.

MR. HAROLD THERIAULT: Thank you, Mr. Chairman, and thank you, panel, it's very interesting. When it comes to boats and water, I'm always interested. I just want to touch on something - maybe, Mr. MacDonald, you can answer this question, I'm not sure. You talked about the terminal only being at half capacity, 1.4 million TEUs and you could increase to 2.5 million TEUs, no problem. The first question is, has there been a decrease this year in TEUs in the Port of Halifax? I'm not sure whether you answered that earlier, but has there been a decrease?

MR. MARK MACDONALD: I can answer that, Mr. Theriault. There will be a decrease in the 2008 year and the final numbers will be reported relatively shortly.

MR. THERIAULT: That just goes along with what's going on around the world. This is the question that I get from people daily and I can't answer it, so I'm going to ask you here today. There has been a proposal in this province to build another port in the eastern part of this province, a major port for major boats to come across from Europe and through the Suez Canal. Here we are with this port here, the whole thing from Europe, they're saying, the only excuse I heard good for it was it's a little bit closer to Europe. One of these ships travelling seven or eight days, it would mean the matter of what, a few hours difference? Here we are

going to build a new port in this province, with this Port of Halifax only at half capacity and decreasing, can you answer that question of why we would build another port in this province to handle containers?

MR. MARK MACDONALD: I'll start and Karen Oldfield can add to it, Mr. Theriault. There are two other proposals in Nova Scotia, one respecting Sydney and one respecting Melford. In each case we're given to understand that the new investment would represent private-sector investment and the proponents of that investment, or each of those investments, have a business case, which we don't have access to, which leads them to believe that there are viable projects there.

From the outset, we as a port have taken the view that it's not our place to say that private investors who feel they have a business case to create a project that would be helpful to a particular area of Nova Scotia were right or wrong. The market will decide whether or not those terminals can be funded by private investment and whether or not those projects go forward.

What I will say, and Karen can add to this, is that the Port of Halifax knows that for it to succeed in the long-term future, we have to build volumes in this port. Building of volumes in Halifax will lead to economies of scale in Halifax. Ultimately it will lead to lower cost supply chain in Halifax which will, in turn, lead to more business in Halifax. That's what we, at the Halifax Port Authority, are focused on.

We need to drive the volumes through Halifax to make Halifax a better port, a more competitive port which will, in turn, feed into - in furtherance of Mr. Preyra's question - CN. Everyone's interests are aligned in the current stakeholders of the Port of Halifax to driving more cargo through the port. Everyone is working together right now, very closely, more closely I think than ever has occurred in the past, to try to drive that business. So that's what we're focused on, Mr. Theriault. We know what Halifax needs to succeed long term. We have to build that cargo and that's what we're paying attention to, rather than getting into the question of analyzing other business cases which we have not seen.

MR. THERIAULT: You say this is the private sector doing this and that's all fine and dandy, I have no quarrel with that whatsoever. What about the hundreds of millions of taxpayers' dollars it's going to cost for the roadways and other things? It's going to be more than private money there. I mean we're talking about twinning highways from Amherst to Canso, twinning maybe four-lane highways they've spoken of, to handle this cargo which will be taxpayers' dollars, I believe. So it's just not the private sector here.

Anyway, that's the question I've been getting from people, why we have a port here at only half capacity and yet we're going to spend taxpayers' dollars to build another port that we may never fill, we may never fill that need. So it just doesn't seem like a good, sound

business proposal to me. Anyway, that's all I want to say. I'm going to hand it over to Ms. Whalen.

MS. WHALEN: I've got a few quick questions. In the last round you had said to me that seven out of eight shipping lines that come here go to New York. Are you confident in saying that when New York finishes their very expensive infrastructure and major works that are ongoing, that the work or the benefit to Halifax won't be threatened? That's what I'm hearing you say, that there isn't a threat, that you're confident those lines will continue to visit here for the same purpose.

MR. MALEC: There's still a valid reason for those lines. Again, each one of them - it's much like they're doing now in terms of this global recession - some are laying up vessels, some are trying to get more market share. Every single one of them is going to have their own business strategy. Our job is to stay close with every one of those, to make sure we understand where we can be of value to them.

We believe actually the biggest challenge coming up in the next four to five years is not the New York dredging, it's the Panama Canal expansion. That will change a lot of the way the global traffic works in and out of North America.

MS. WHALEN: What do you see the impact on Halifax of that challenge?

MR. MALEC: We're cautiously optimistic and, in fact, we will be at a conference in the next couple of days working with people on that, the fact that this will allow vessels to bypass the lower U.S. West Coast ports which are the busiest right now in North America - Long Beach and Los Angeles - and the most expensive. It will bypass that, they'll allow vessels to come through the Panama Canal and possibly go northbound on a run.

The question at that point will be, can we put together enough of an attractive package with our customers, with our stakeholders like the terminal operators and the railway, to say it makes sense to get those ships now coming across the Pacific, to go that extra day and a half transit turn time from New York and back down again? This will factor in, for example, how many vessels they are going to put in that string.

Right now vessel charter costs are dropping through the floor, so there are more vessels that are available at a better cost; bunker prices are reasonable. Six months ago we were putting business proposals together because the price of fuel was rocketing through the roof. So it's going to be a case-by-case basis.

MS. WHALEN: And it's going to fluctuate because we can expect the cost of energy to go back up.

MR. MALEC: That's right. Our big thing has to be to stay close to every one of these lines.

MS. WHALEN: I wanted to just go back quickly to the rail cut, where you said that there were no time studies done to see if that would be a benefit. You don't know if it will have a measurable impact on time, is that right?

MS. OLDFIELD: As you know, the province is currently taking a good, hard look at the rail cuts, so we are keen to see the outcome of that and keen to understand how this may actually work to build efficiencies through the port.

MS. WHALEN: So at the moment you don't know whether that would have cost implications to the shippers, would become a marketing benefit to have in place. Could you say that it would?

MS. OLDFIELD: I think the starting point for us is that this is something which is desired of benefit on the radar list for our customer, which is the terminal operator. So they see significant operating benefits to them. Thus, we're quite interested in understanding exactly how that might work and exactly how we can lever that to be of benefit to the port.

MS. WHALEN: Can I ask who proposed the idea? Would it have been the terminal operator that has been pushing the idea or suggesting that it's the answer to some of the problems?

MS. OLDFIELD: Interestingly enough, I think the rail cut has been bandied about for a number of years by a number of different people, so I certainly couldn't say it's this person or that person, I think it's a joint effort.

MS. WHALEN: Going back to projects that might be ready to roll, you talked about there's going to be a need for applications and business plans. Have you got a list right now of projects and are you working on those business plans now, so that you would be ready? Are any of them ready to roll right now, if there was a call?

MS. OLDFIELD: Yes. I think we would be in reasonably good shape.

MS. WHALEN: Can you tell us what might be your top priorities?

MS. OLDFIELD: I think, as I mentioned before, we are going to be one party that will lay a number of potentials on the table. Even in our own organization, it's difficult to say, when you have two terminal operators, very difficult to say okay, yours is top priority and yours is not. So, for example, if I was sitting down talking to Calvin Whidden, anything on his list is my top priority and if I was talking to Doug Rose, it would be the same, so we're going to have to work that through in a very balanced way.

MS. WHALEN: We were talking about your capacity being underutilized right now by quite a wide margin. What about the Fairview Cove expansion and the idea of moving into Rockingham, which comes close to home for me? We've seen the plans and it has been talked about for many years. Where would that lie in terms of making the port more competitive?

MS. OLDFIELD: Well, in terms of making the port more competitive, it is definitely something on our radar list, part of the 1,000-piece puzzle that I mentioned and something that over the long term the operator is very keen to pursue because our business is a long-term business, it's a long game. It's not a quarter-to-quarter business, so, high on the list.

MS. WHALEN: Long term, okay.

MR. CHAIRMAN: Order, please, thank you. Mr. Bain.

MR. KEITH BAIN: Thanks, Mr. Chairman, certainly a very interesting conversation going on here. I just have a couple of short questions. I guess the first one is going to be about the rail cut. You mentioned it's something that has been talked about the last number of years by different groups. Is it something that the Port Authority supports?

MS. OLDFIELD: As I mentioned just in the last question, our terminal operator is fairly keen to see this project, at least to go through the study stage to understand what we're dealing with, and we are supportive of their position. So we need to find ways, if they see an advantage there, then we definitely encourage and look forward to seeing the outcome of the study.

MR. BAIN: We know that the Port of Halifax is certainly an economic driver, not only to the city but indeed the entire province. So I guess, looking for a wish list or whatever name you might want to call it, it will be interesting to hear what your opinion is of what we as a government can do to help the Port Authority.

MS. OLDFIELD: Sure and, you know, there are really three things that we could kind of point to right off the top. Mr. Chairman, I would start by encouraging the members of the committee to come down and have a little look around. The pictures are great, but there's nothing like kicking tires to understand what's actually happening and to understand what the art of the possible is. I guess in answer to the question, education is very important and I'm really happy that the members have read all their homework and have a very good appreciation for what it is we're doing. I would say that is number one.

Number two is, you may be aware that the federal Minister of Transport is currently undertaking a rail-freight service review. That is a national review anticipated to take approximately 20 to 24 months - I would say at this point they're about six or seven months in. Rail being so important to Nova Scotia and so important to Atlantic Canada, I would

certainly encourage the committee and the members of the committee to be aware of the review. There is opportunity to participate, to make points and so forth - I think that's a very, very important aspect. Frankly, as I say, that spans the province, although rail being our lifeblood, it is very important to the Port of Halifax, as well, so I think being abreast of that and seeing where we need to bolster as a province, that would be helpful.

[10:30 a.m.]

The third thing is that we have had some very good assistance from different folks across the gamut, so I certainly would not want to leave the impression that work has not been done. Yet, more work can be done always and this is an area where I think more work can be done, which is that we have an opportunity to really push the tourism connections that stem from our cruise ship industry. That, again, is something that spans the province. It's not just a Halifax thing, it's actually all around the province and all around Atlantic Canada.

We do have an opportunity, I think, to lever those 250,000 passengers that are disembarking here, making sure that we have programs that may bring them back for a conference, that may bring them back for other opportunities. I do think that there is an opportunity there because the one great thing about the cruise is that though those cruise ships may come to Halifax, they're not a one-port-of-call business, they have to go to a number of places to actually make a worthwhile cruise, so that's something that can really benefit the entire province.

MR. BAIN: I appreciate in Mr. Theriault's discussion about whether or not another port is needed or necessary, and your candour in your reply, because you said they have a business case we're not privy to and we're going forward on our own. But when you mention the tourism industry, I think of the Port of Sydney as an example, that is one of the ports of call. Not as many cruise ships visit the Port of Sydney as they do Halifax, but development of the Port of Sydney is going to help the cruise industry along with a lot of other things.

MS. OLDFIELD: Yes and you know, just before Christmas, through the auspices of the Shipping Federation of Canada, a day was put together called Marine Day and it was really interesting. All of the ports in Nova Scotia came, everybody had an opportunity to do 10 minutes and I think that the people in the room, at least those to whom I spoke, they walked away saying wow, when you put it all together it's quite a package.

So I guess just to conclude, I think there is opportunity here for the committee to continue to devote energy to supporting the Gateway and the Gateway initiatives. So that would be, I guess, the fourth thing.

MR. CHAIRMAN: Thank you. Ms. Conrad.

MS. VICKI CONRAD: Thank you for the update on the situations at the port and the encouraging, optimistic comments that we're hearing today. It is good to know that there is a report out there that shows there are some good, stable credit ratings, so that is good news.

We do know, though, because we've heard from past discussions that we've had with your members, the challenges in 2007 and 2008 were huge in terms of the strong Canadian dollar, the rising fuel cost, the loss of some of the customers to the port, such as Maersk, Loblaw and Caterpillar. Today we're seeing a whole set of other different challenges in terms of the market conditions globally, and it's no surprise to any of us that those challenges are going to be huge hurdles for the port.

There is a dramatic decrease in container traffic all across the world. The Asian markets are already showing decreases in their manufacturing sector and we also see the auto sector facing significant challenges.

You mentioned in your opening that the cargo, part of the roll-on/ roll-off cargo was kind of not a new line but significant to the port. That would have been automobiles being transported. Is that what roll-on/roll-off is? What significant impact does the auto sector's challenges have on the port for that type of cargo?

MR. MALEC: That is true, if we were talking about Autoport, the term "roll-on/roll-off cargo" would apply because the vehicle is actually driven on and off. What it means for us is there are these very heavy-duty industrial trailers called MAFIs and it is more along the lines of project cargo. For example, if you were shipping a boiler, or something like that, or a piece of extra-dimensional cargo, really heavy industrial cargo, there are a couple of carriers that service the port, ACL in particular, that specialize. Their ships are actually hybrid vessels built so that the lower half of the vessel takes roll-on/roll-off cargo and the upper half of the vessel takes containerized cargo. So where ACL is one of our prominent customers in the port and has been here for 30 years, they generate a significant amount of volume like that.

That would also apply to stands of Nova Scotia lumber for export loaded on one of these. So it's something that doesn't really fit well in a container, that's . . .

MS. CONRAD: So it's the mechanics of the shipping.

MR. MALEC: That's what that would mean.

MS. CONRAD: Okay.

MR. MALEC: That's right, you know the excavators for Fort McMurray, any kind of large, bulky, project-type of cargo.

MS. CONRAD: So there are no automobiles being exported or imported?

MR. MALEC: Very few through Halifax. The primary automobile handling centre for Halifax would be on the Dartmouth shoreline in Eastern Passage, the Autoport facility. ACL does carry some cars on their roll-on/roll-off service, but those are usually individual cars owned by people who are moving back and forth and repositioning their own personal vehicles.

MS. CONRAD: The pulp and paper market and the newsprint being moved out of Port Hawkesbury is significant and also I would suggest, too, the pulp and paper and newsprint product coming out of Bowater Mersey. We all know that Bowater has been shut down for the past five weeks, with a reopening date of January 26^th. What impact has that shutdown had on the port?

MS. OLDFIELD: Clearly you're at the nub of it because if we have industries in our catchment area, starting with Nova Scotia and then the broader Atlantic Canada and then up to and including the Ontario market, if our export markets are suffering, if our export goods are impacted by what is happening in the global economy, then that very definitely has an impact on traffic coming into and out of the port, no question. So not only does it affect that company, there is also all the way through the chain. So the impact of a five-week shutdown definitely has a bite.

MS. CONRAD: Do you know how many containers that would be a week?

MR. MALEC: It's hard to quantify in terms of containers per week because it depends on the contract they're servicing. For example, we stay very close with Kent Nickerson and his team at Bowater. When they have a particularly big cargo, if they're exporting to the newspaper in India or if they're going to South America, it depends on which carrier they're doing, they can go anywhere between a relatively small consignment of five boxes up to 45 boxes in that particular contract.

What we do is we work with them to help them smooth out their surges by providing staging areas, for the trucks coming up from the Liverpool plant, on port property, so they can drop that load off and run right back down and get another and move the boxes as quickly as possible, if they have a little surge in their production output. So it really depends on which contract they get, that will affect their volumes.

MS. CONRAD: Right, thank you. Another question and it's a bit of a follow-up to my colleague, Mr. Theriault, in regard to the other ports. I understand from previous media releases that somewhere around the Spring of 2008, this past Spring, there has been some consultation that happened between the port, the Strait of Canso Superport and Sydney Marine and some of those consultations were around working together, strategizing around collective marketing, looking at security, transportation, and perhaps some international trade and government policy.

So things have now changed since those discussions in terms of the economic climate out there. So those discussions, I would think, would have to take on a different vein. Looking at the infrastructure dollars and potential Gateway dollars that are coming to the province, those discussions would perhaps be a little bit more sensitive in terms of what everybody's priorities are, and certainly that marketing strategy - that collective marketing strategy - would probably look a little bit different than those initial discussions back in the Spring.

Can you give me an idea if there have been any further discussions about collective marketing? If so, what types of strategies are being developed to weather this economic storm for all of the ports involved?

MS. OLDFIELD: Sure, I could just offer two things, two quick thoughts, which are that firstly, we've not had additional discussions since - I'm going to say really - Marine Day. Marine Day did give us an opportunity to share some thoughts, which was late Fall, just before Christmas.

There is still a need for marketing our region generally, marketing our region globally, taking our region to the world, and that doesn't matter whether you're Lunenburg or Sydney or Halifax or another port around the province. Where there's an opportunity for an international connection, whether it is a passenger or whether it is cargo, then it's important for us to be talking about making sure that the world knows where Nova Scotia is and where the Atlantic Gateway is. So certainly there's still a need to do that.

So the question then becomes, how does this happen? I think in that regard there have been some really good discussions which have been held jointly, not just by one port but with several, with the folks at NSBI - Nova Scotia Business Inc. In fact, there is, I think it's called the Atlantic Gateway Business Unit now, of Nova Scotia Business Inc., which is really looking at ways that they - Nova Scotia Business Inc. - can tie into the marketing, the building awareness of the Gateway generally. So that would not be one port, that would be the whole gamut of ports because, of course, they have a provincial mandate.

I think one of the good things about that is it shows collaboration, it shows collective effort and it's not one instead of the other, it's the team approach. At the end of the day the business is going to go where it needs to go for cost reasons, for service reasons, for

whatever reason. Perhaps there will be some competition but you need to start by having the overall marketing approach.

MS. CONRAD: Understanding that each port would obviously have their own business plans underway and perhaps not each port is wanting to share their business plans with each other, which stands to reason, however, there is some competition that would happen over time, as market conditions hopefully improve, sooner than later. Are there discussions around: this type of business works better here in Halifax, this business works better here in Sydney, this business works better here in the Strait and so let's get together, not sharing trade secrets so much as looking at best ways not to be kind of coming to a head with each other?

MS. OLDFIELD: Sure, I think that's a fair point and I think that what we've tried to do is just that, to find ways that instead of setting the agenda to set up for conflict, rather, set the agenda to help each other to succeed in our particular areas of expertise. We talked earlier about cruise, just one example that lends itself easily to collaboration because a cruise ship is not going to come to just one port, it's got to go to a number.

MR. CHAIRMAN: Order, please. I'm sorry to keep cutting you off here. Ms. Whalen.

MS. WHALEN: I was noticing here on the map, I'm quite interested in the long-term view of the port and its management. It says you're only responsible for properties within this harbour line. So you don't have any interest at all, then, on the Shearwater side or the long-term opportunities that might exist over there? Do you have any jurisdiction?

MR. MALEC: Well, you're quite correct, that is outside of the legal harbour limits that the HPA has a mandate in. Now, that's not to say that we would not be interested in land there but in terms of developing that particular piece of property, there are a couple of key things that maybe have to be restated. One is that there is not really a suitable piece of property out there with marine frontage. The navy has certainly given no indication that they're going to abandon the Shearwater base anywhere in the near future.

[10:45 a.m.]

The second one is the topography, the angle of that slope. To make any kind of a large-scale marine terminal function effectively there, you'd have to have a significant piece of land which is relatively flat and stable. The third thing is the wind shear, turning in around Timmins Cove in that area. The reason why these are top of mind to me is because we studied these extensively when Maersk came to the Port of Halifax and seven other ports in 1999 and said, we don't like New York anymore so we want to squeeze their lemon, you outbid for the business.

Of course, they stayed in New York, but we went right through the process and were the finalists with Baltimore for that business, and we studied every possible piece of the shoreline and the coastal region, including Navy Island and the Bedford Basin. So when you allude to the Rockingham shoreline, that was the preferred area because of the potential to build out rail access, flat land, et cetera.

MS. WHALEN: With the build-out in Fairview Cove, what extra capacity would that provide? You're at 125 right now, what would that take you to if you did the build-out along Rockingham shore?

MR. MALEC: There are actually two parts to that and I'll add very quickly about that because I don't want to get the gong. Directly adjacent to the existing terminal at Fairview Cove is the old dump site. That's one particular area for expansion. The advantage of that is it's a contiguous seawall, you could build out there. It's completely linked and parallel. So there are some very positive things about that.

Turning the other way, going up the Rockingham shoreline, of course, that allows you to do a complete greenfield site and take the existing CN track bed, which is extensive, adjacent to the highway, and actually fill in and build out a new seawall quay, which would then be at right-angled configuration to the terminal.

MS. WHALEN: And how much capacity would it give you?

MR. MALEC: Now, going into the dump site lands, you could probably increase the capacity by roughly half a million TEUs; going to build a purpose-built terminal on an infill site, really it is dependent on the costs involved because if you wanted to go a 2,000-foot dock, a 4,000, a 6,000 . . .

MS. WHALEN: And that's in-filling into the Basin.

MR. MALEC: Correct, so it would really be driven by the business case there.

MS. WHALEN: Okay, that gives me a good idea but you have thoroughly looked at the Shearwater area as a possibility?

MR. MALEC: Yes.

MS. WHALEN: And do you have any idea what it would cost to make it possible to build there?

MR. MALEC: Well, again, first of all somebody has to vacate property over there and nobody is doing that.

MS. WHALEN: We have a constraint before we get there. On your property valuation on the real estate side, do you have an idea what the property is worth at the Halterm facility, where you're right in the heart of downtown, really, right on the peninsula?

MS. OLDFIELD: I'd be giving you a ballpark. If it's important, we can certainly work backward and give you a flavour.

MS. WHALEN: It's something I would be interested in if you could. It doesn't have to be today, it could come back to us.

MS. OLDFIELD: Halterm, obviously, is subject to a long-term lease. This may not be where you're heading, but I'll just mention to you that one of the interesting challenges that we face under our Canada Marine Act is that if the Port Authority were ever to have surplus land, then the land and/or the proceeds of sale would revert to the federal government. We can't flip land, put the money in the bank and do something interesting with it, it's not the way it works.

MS. WHALEN: You couldn't build a port somewhere else or take that money?

MS. OLDFIELD: It would be a lot more than just the HPA that would be involved in doing something like that.

MS. WHALEN: Fair enough. Do you get involved at all with labour issues and availability of labour in Halifax? Is that something that touches you at all?

MR. MALEC: No, the contractual obligation here in the Port of Halifax is the members of the Halifax Employers Association have an exclusive contract with the three ILA unions. There is no mechanism for the Port Authority to participate in that.

MS. WHALEN: Have you any idea if we have sufficient availability of the labour and the skilled labour that we need?

MR. MALEC: Right now what we do is we periodically convene meetings with the HEA and the ILA, review the port's business case and business development. We stay abreast of the situations, for example, the development of the backup labour pool recently, the cessation of the bullpen, the training program the HEA is going through. We assist them in that by providing land for them to train on and use for simulation.

MS. WHALEN: Are there constraints right now in terms of the availability of skilled labour or just the labour that we need?

MR. MALEC: That's really a question that the HEA members would have to address, in fairness, they're the direct employers of labour.

MS. WHALEN: Okay. Well, it's a concern to us, as you know. I see the port, number one, as a major draw for labour and employment, certainly a wonderful stimulus to our economy here in Halifax. You, in fact, are one of the major employers - you would be in the top five I'm sure. We see the impact and I'm interested to see that you're coming up with a most recent impact study so that we'll be able to get a current snapshot of how that is. I think many people living in Nova Scotia are not aware of the huge benefit that we have economically and how many people are employed directly even as a result of this.

I'm just looking to see whether we are able to supply the need that you have, if it's one of your constraints.

MS. OLDFIELD: The key there - and they've spoken largely on this on the West Coast - it's the demographic and it is the aging demographic of the stevedore, particularly on the West Coast, so the issue is a fair issue and it's one to have our eye on, as the collective. In terms of the specifics it's definitely something to be working with the HEA because we have to keep our eye on that to make sure that we continue to have the expertise and that we are training the next generation.

MS. WHALEN: I'd like to ask, if I have a minute or two - I think I do - about the revenue breakdown. I was looking at your statements, it shows revenue in one bulk, of the ones we have here. Container shipping is what we're most concerned about because it has been declining and I'm sure it's very much on your sights, although you've had some positive things happening in the cruise and perhaps in the bulk cargo. Could you give me an idea of the relative breakdown? Is it 70 per cent for cargo that's containerized and then the other, those key elements of your revenue, what are they?

MR. MARK MACDONALD: I'll just make one comment, Karen, and then I'll turn it over. The reference I made in my opening comments about the strategy of our board and predecessor boards, in our revenue that derives from container shipping - and George will quickly correct me, I'm sure - essentially it falls into three categories. One is the leases which we have with the container-terminal operators, which will show up as such on our financial statements. Those leases are not tied to traffic volumes and that manifests the decision which was made early on to protect the secure revenue base. Then there are two categories of charges which are applied - and here's where George can jump in as he sees fit - a berthage charge and a wharfage charge to each container ship that comes into the port. Those are volume dependent. George or Karen, do you want to pick up?

MR. MALEC: Just to clarify that, yes, there's a charge to the vessel, the dockage alongside - and I referred to that in the cruise ships - and then the per container assessment that would come ashore, so three very distinct streams, that's correct. Now when you break it down, I may say that several years ago - and please correct me if I'm wrong, Karen - the Port Authority made a conscious decision when it was looking at doing the contract negotiations with the terminal operators to put itself in a more stable position with assured cash flows, to be able to reinvest on a continual basis. Rather than rolling the dice and saying, we'll do this, we did that.

MS. WHALEN: So you set a flat fee for the leases?

MR. MALEC: Yes.

MS. OLDFIELD: CPI - if I could maybe speak to that. There are a couple of really important facts here on the financial side. At the end of the day we are in a lot of market turmoil. This is a long-term business and we are all collectively in tough times. When we come to what's happening in the global economy right now, our business is no different. Now, what we have done is protected our ability to reinvest for the long term.

We have invested, on the cargo side of our operations alone, over $55 million in the last five years, that is a huge amount of money, $55 million, the Port Authority alone. Why we've been able to do that is because we have secured our revenue stream so that we have the ability to do that. Our financial wherewithal also gave us the ability to react very nimbly to what's happening in the world right now. Whereas our board had approved a tariff increase early in the Fall, as we continued to monitor the situation through the Fall, we took a decision at the end of the year to actually defer that for the first six months of the year. We can only do things like that because we are in a financial position to be able to do that and to be able to reinvest and to maintain the stable financial position that we have.

On the revenue side, just to finish and answer your question, the revenues attributed to the container side of the business are substantial, but at the end of the day probably we're looking at approximately half.

MR. CHAIRMAN: Order, please. Mr. Muir.

MR. MUIR: A couple of quick questions. There are 17 ports in Canada. In terms of size or bonds - whatever it is, how you rate them - how does Halifax rate?

MS. OLDFIELD: Number three. Ports are a little bit like lawyers in the sense - and I'm saying that tongue in cheek because there are two of us here - for example, if we were to go to tonnage and there are some ports that report only tonnage, you would look at ports in the seaway which would have more tonnage, for example, than the Port of Halifax. We are number three in terms of container ports in this country and revenues.

MR. MUIR: That's a good answer from a lawyer.

MS. OLDFIELD: Yes, a former - a reformed.

MR. MUIR: A reformed lawyer, but Mark's still in the business. Secondly, a number of years ago, I think actually the last time I toured the port you were looking at post-Panamax cranes, that was the big thing, to get them. I know they were pretty expensive - didn't you say they were $9 million or $10 million to get one?

MS. OLDFIELD: Yes.

MR. MUIR: Are you at capacity now there? Given the economic situation I know you're not getting as much traffic, but do you need more of those right now or are you reasonably well equipped?

MS. OLDFIELD: It's a great question in the sense that it is the stevedores themselves, the terminal operators, who make the investment on the crane side of it, it is not the Port Authority. So those cranes that you see at Halterm or at Fairview Cove are direct investments made by those terminal operators. They're the best people who can say if they're hitting the product numbers, the productivity numbers that they want to be hitting, if they're getting what they need from their equipment.

So from our perspective, as we go around marketing the port, it's very important for us to be able to say we have that equipment. In terms of how many, terminal operators are the best to say, I need more, I have enough, and so forth.

MR. MUIR: Ms. Whalen, I think it was, had asked about the value of your assets. Do you pay property taxes in HRM?

MS. OLDFIELD: We pay a payment in lieu of taxes, yes, and the payment that we - again, I'm just pointing to the economic impact study which is to be out in the next couple of weeks, which I think would show, on average, in excess of $1 million per annum, as payment in lieu of taxes.

MR. MUIR: I'm just thinking that might be a way to get the value of that property.

Secondly, or the third thing, I guess . . .

MR. MALEC: One point of clarification, our tenants also pay taxes. Those container-terminal operators pay taxes to HRM. So our properties that are not leased, we pay PILT - properties that are leased - like the two big terminals, those are taxed.

MR. MUIR: Okay. So it may give some indication that way.

This federal rail freight study which you talked about and said that the province should pay attention to, do you have any other comments you want to make about that? I guess it was kind of the first I knew about it this morning.

MS. OLDFIELD: Well, simply, in our discussions with our colleagues at Transport Canada, including the Minister of Transport, we are certainly strongly encouraged to be kept abreast and to make a submission to the federal minister in the course of that. So we are in the throes of that, we are watching this and because rail is so important to us, it's something that we have to keep a close eye on.

[11:00 a.m.]

MR. MUIR: Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you very much. Just before I get you to wrap up on any other comments that I unfortunately had to cut you off for, there have been some requests for information and I would just go over those and ask if you can provide this information to the clerk so we can distribute it to the members. There was a question put about overhead costs for the port and what they are in administration. So if you could provide those. Also, there was a request for TEUs, the decrease - you indicated that information will be available very shortly anyway, for 2008, and it will be interesting to see how that's compared over the last three to five years, to see where that's going - and the property value estimate that has been requested.

The last thing I would like to suggest to the committee is I would personally like to take you up on your invitation to see the port and maybe we can arrange that through the clerk. If any of the members would like to attend, I think it would be very useful for us and that would be very informative indeed.

I'd like to give you an opportunity to wrap up and anything that I cut you off on, you have a chance to answer now.

MR. MARK MACDONALD: I would add one thing that hasn't come out in the discussion, Mr. Chairman, which is a year and four months or so ago the port took the decision to create a presence, an independent presence in the United States. The port took on, as our U.S. commercial director, a man named Paul DuVoisin. Paul is based in New Jersey and he's a shipping-line person. He's a man who participated in the kind of decisions that shipping lines make about placement of their ships and strings and where those strings call.

In the time that Paul has been with the port, he has worked extremely closely with George and with Karen in a great deal of new business development initiatives for the port, and that's kind of the thought I wanted to leave you with, that we've been, or the port has been, working extremely aggressively at all business development possibilities that may be out there, and there are some good ones.

As a result of Mr. DuVoisin's involvement with the port, we feel that we understand the competitive position of our port in the world down to the penny, because he is a person who made these decisions and knows how those decisions are made.

So we've worked very, very hard at that, Karen and George and their team, and we are hoping that over time we'll see some good results. Karen.

MS. OLDFIELD: Yes, I think I'd echo that Paul has been a very strong addition to our team. I would just want to leave the committee with the understanding that when it comes to our business development pipeline, we have real, live prospects and so we take the top one, we chase it down, it works, it doesn't work, we go to the next one. So we have real live prospects which bode very well for the long term.

I think the other point I would like to leave with the committee, as well, is that in talking to some executives with our terminal operators, and you know these are world-class players that we are so lucky to have in our province, they are world-class players with a reach around the globe, with a global perspective. You know even as recently as yesterday, having a conversation with one of our top terminal execs, and this is a terminal with multi-terminals around North America, saying we are down everywhere. So that doesn't necessarily help us right here, right now, today, but we do have to take a long term. The market, you know, we have to work together.

I'm really happy with the spirit of collaboration, with the level of effort, with all hands on deck, really, working to take this port to the next step - very important. So we're encouraged by that and we definitely encourage that type of collaboration, we are open to all of it. So I'm really happy when I see it actually coming to bear. George.

MR. MALEC: Well, just thank you for the opportunity here. Just a couple of quick, follow-up thoughts, because I have been around for a whole long time and I can remember when the port operated more as an island unto itself and that's certainly not the case today. The outreach to the province, to the municipality, if you wanted to see a physical expression of how the port is becoming more and more part of the surrounding community here, just look no further than the seaport and the seawall walkway that connects people from the port to the downtown area and back again. It provides that.

In terms of joint marketing and development and realizing that the assets here are really for a lot of people to benefit from - for example, six months ago we sat down with the NSBI business unit on the Atlantic side of things, on the marine side of things, and said okay, we see our emerging market strategies going forward from India into Vietnam and Malaysia. Those are important markets, we need a lot of penetration. It's going to require presence in those markets.

I'm happy to tell you that today there's an NSBI delegation led by Minister MacIsaac in Vietnam right now. So we gave them all of our briefing notes, we gave them exhaustive background research we had done on Vietnam and they are there now, and that's part of what Karen alludes to. It's going to take a lot of people working cohesively to move things forward here.

MS. OLDFIELD: I know I gave up my right but I just need to conclude. We all have to work hard to be in position, that's really what we're talking about, to be in position. Then we have to work to get into position and then we have to work to put the puck in the net. So it is very much a collective effort. I think we're well positioned and we just have to keep banging away. So thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you very much. We have some committee business to conduct just shortly after this, there are a couple of agenda items. There was one other thing that was alluded to here, and Mr. Preyra reminded me, there was a wish list of projects that you have for potential infrastructure funding that may come from the federal government. We would like to get that when you have it, as soon as possible.

With that, I would like to thank you very much for coming today. It has been very informative and very helpful and I appreciate you taking the time to come. Thank you.

[11:08 a.m. The committee recessed.]

[11:14 a.m. The committee reconvened.]

MR. CHAIRMAN: We'll call our committee back to order. We have to pick up three, I guess we'll start with three because we don't have much time left today, one from each caucus, of the next priorities. The order we're going in will be the New Democratic Party - the last one on the agenda was from the Progressive Conservative Party so the next one would be from the NDP caucus. What's the priority you would like to have from your list?

MR. PREYRA: We're thinking about the Electricity Marketplace Governance Committee and the whole question of the electricity.

MR. CHAIRMAN: Okay, are you happy with that one? The Liberal caucus, what do you like?

[11:15 a.m.]

MR. THERIAULT: I chose Nova Scotia Power, but Ms. Whalen wasn't here when I . . .

MR. PREYRA: We're both asking the same thing.

MS. WHALEN: I'm fine with that, we're just picking one right now.

MR. CHAIRMAN: Yes, just one from each caucus and then you can come back and I think maybe at the next meeting we should set the agenda. I don't know how long we're going to be here, until the next election or the Legislature sits. The Liberal caucus is happy with Nova Scotia Power Inc. The PC caucus said earlier InNOVAcorp, so is everybody happy with those three selections and we'll go in that order of the way we picked them?

The clerk has one other thing about information that I'll let her describe, the proposed packages that we receive and here's what the proposal is from the office here. One paper copy going to each of the following: caucus researchers would get one copy of the material, Hansard would get one copy, Legislative Library would get one, the committee clerk would have one, and all material would be sent in an electronic briefing package as well to all members and all researchers. That's pretty well what all other committees do. Does everybody agree with that? Mr. Preyra.

MR. PREYRA: Mr. Chairman, I do want to thank the clerk for the quality of the information we got in the last briefing, it was very good I thought.

MS. CONRAD: If I could just ask a question about the electronic packages. For me, I find it difficult to manoeuvre around - I mean the information is great. I don't get an opportunity to pick up my hard copy until I'm actually in the city, although I know that I can print off. Is there an easier way to view the documents? I found it very difficult when opening a document. I'm reading it, then to move to the next link in the package I'm needing to close out my window completely, then go back to the e-mail and re-open the e-mail. It's probably a technical thing that I'm doing wrong. If anybody has a little . . .

MR. PREYRA: There's a little x at the bottom that refers only to that document.

MS. JANA HODGSON (Legislative Committee Clerk): I'll be happy to speak to you about it after the meeting.

MS. CONRAD: Okay, great. I don't know if anybody else is having that difficulty.

MR. CHAIRMAN: Okay, a motion to adjourn would be in order.

MR. BAIN: So moved.

MR. CHAIRMAN: We stand adjourned.

[The committee adjourned at 11:18 a.m.]